Land Acquisition Challenges Threaten Ethio Telecom’s Expansion Plans

Ethio telecom’s Chief Executive Officer, Frehiwot Tamiru, has identified unsuitable land acquisition procedures, especially in Ethiopia’s urban centers, as the primary roadblock to the company’s ambitious infrastructure expansion plans. Addressing the parliamentary committee for Public Enterprises and Institutions Affairs, Frehiwot emphasized that the capital, Addis Ababa, presents the greatest challenge for telecom tower installations due to exorbitant compensation demands and bureaucratic delays.

Frehiwot highlighted a host of obstacles affecting the state-owned operator’s performance, including financial constraints, security issues, vandalism, fraud, and lack of access to commercial electricity and roads. However, she underscored that land acquisition hurdles and compensation demands stand out as the most significant impediments, particularly in urban areas.

“Addis Ababa is the most challenging city for tower installation compared to rural areas, which fare better in this regard,” she noted. Frehiwot called for urgent intervention from lawmakers, urging them to push for more practical land policies to support the operator’s growth efforts.

The parliamentary review also brought to light concerns about service reliability and accessibility. MPs criticized Ethio telecom for inconsistent telecom services, gaps in rural connectivity, and the high cost of its offerings. Gaps in regions such as Amhara, Oromia, Benishangul-Gumuz, and Southern Ethiopia were highlighted, with Frehiwot attributing them to inadequate infrastructure due to land and road access challenges, compounded by financial constraints.

Balcha Reba, director-general of the Ethiopian Communication Authority, supported Ethio telecom’s stance, stressing the need for streamlined land allocation processes. Balcha also revealed that the Authority is drafting legislation to regulate land and building usage for telecom infrastructure, aiming to address lease complications and support the sector’s expansion.

“If payments for land acquisition become necessary, we ask for your support to ensure the telecom sector can continue to grow,” Balcha told lawmakers.

Ethio telecom, which serves nearly 81 million customers—including 78 million mobile subscribers—has set an ambitious goal to invest USD 1.1 billion in infrastructure upgrades during Ethiopia’s current fiscal year. Despite facing criticism for internet and phone service disruptions in conflict zones, Frehiwot clarified that such issues fall outside her mandate as CEO of a state enterprise.

The discussions underscore the critical role of infrastructure in bridging Ethiopia’s digital divide while also highlighting the pressing need for reforms in land acquisition to unlock the potential of the country’s telecom sector.